Agenda and minutes

Apologies were received from Cllr Rosemary Brown.

The Chairman reported a permanent change of committee membership as agreed at the last Council meeting on 23 February 2016 where Cllr Stephen Oldrieve was replaced by Cllr Mike Hewitt as a Committee Member and Cllr Atiqul Hoque replaced Cllr Mike Hewitt as a substitute.

The Chairman formally announced the passing of Cllr Jeff Osborn and gave details of funeral and reception arrangements.

To confirm and sign the minutes of the Audit Committee meeting held on    

26 January 2016.                                             

The minutes of the meeting held on 26 January 2016 were presented.

Resolved:

To approve as a correct record and sign the minutes of the meeting held

on 26 January 2016.

To receive any declarations of disclosable interests or dispensations granted by the Standards Committee.

There were no declarations of interest made.

The Council welcomes contributions from members of the public.

Statements

If you would like to make a statement at this meeting on any item on this agenda, please register to do so at least 10 minutes prior to the meeting. Up to 3 speakers are permitted to speak for up to 3 minutes each on any agenda item. Please contact the officer named on the front of the agenda for any further clarification.

Questions

To receive any questions from members of the public or members of the Council received in accordance with the constitution. Those wishing to ask questions are required to give notice of any such questions in writing to the officer named on the front of the agenda (acting on behalf of the Corporate Director) no later than 5pm on Wednesday 20 April 2016. Please contact the officer named on the front of this agenda for further advice. Questions may be asked without notice if the Chairman decides that the matter is urgent.

Details of any questions received will be circulated to Committee members prior to the meeting and made available at the meeting and on the Council’s website.

There were no questions from the public or members of the Committee under

this item.

Michael Hudson presented on this item.

In the course of the presentation and the discussion, the issues discussed

included: the high volume of caseloads handled, the level of complexity surrounding welfare reforms and the processing of related claims. Mr. Hudson

noted that compared to other unitary authorities the error rate for Wiltshire Council came out at a lower level of settlement and below average. He identified staff appraisal and training as the main areas requiring improvement to raise performance levels.

Darren Gilbert, Director, KPMG, reassured Members and reiterated that whilst the level of errors was material and therefore reported it was common place given the complexity of issues being dealt with and that it was not exclusive to Wiltshire Council.  He noted that the external auditors were very satisfied with the findings on the Housing Benefit Subsidy.

Mr. Gilbert clarified that the extrapolation methods referred to in the report were standard methods of assessment consistently used and applied by Auditors and were not methods exclusively designed by KPMG.

In response to questions posed on high staff turnover and the attendant reasons, Michael Hudson informed Members that the problem of staff turnover was mainly due to the age profile of employees and the consequent effect of retirements and redundancies. He highlighted that not all vacancies created due to retirements and redundancies had been filled hence the pressure on staff and risk of errors among other problem areas. In response to questions raised regarding overpayments and fraud Mr. Hudson announced that an Annual Fraud report that was currently being compiled would be taken to the next Audit Committee to furnish Members with more detail regarding fraud activity within all areas of the Council.

Daren Gilbert informed Members that the Audit Fee Letter 2016/17 was an advance notice of the key elements of audit work proposed for the financial year and the fee that would be charged.

In response to a question posed regarding the £5,000 increase in the Housing Benefit Grant Claims fee, Mr. Gilbert noted that the fee reflected the relatively high volume of claims involved and consequent level of work required.

Resolved

That the Audit Committee notes the contents of the Audit Fee Letter 2016/17

Darren Gilbert, Director of KPMG, presented the detail of this report.

In the course of the presentation and the discussion, the issues discussed

included: the significant accounting risks surrounding the administration of the  Better Care Fund, the challenges of closing the funding gap and achieving value for money, reporting of changes to the financial statements and the cost of the external audit.

In response to concerns raised about the total cost of the external audit, Darren Gilbert noted that the 2016/17 audit fee was set externally as always by the Public Sector Audit Appointments Ltd (PSAA). He further highlighted that the 2016/17 fee had been set at the same level as that set for 2015/16 and this had preserved  25% reductions applied that year.  This was in addition to savings of up to 40% in scale audit fees and certification fees achieved in 2012/13. Mr. Gilbert informed the meeting that the external audit fee was relatively cheaper compared to that paid by other councils and the benefits were far reaching.

Baroness Scott noted that the Council Executive vigorously challenge the fees payable to KPMG every year and had negotiated and worked hard with KPMG in bringing the fees down to the current amount.  Michael Hudson informed Members that the procurement of external audit and future fees payable was being looked at.

On the issue of changes to the financial statements, Mr. Hudson assured Members that no significant changes had been made to financial statements submitted without the Committee having had sight of those, and any changes would continue to be reported to the Executive and to the Committee.

Mr. Gilbert commended the Council for being ahead of the game in being compliant with regulations that were yet to be enforced within the next two years. He noted that this added value by expediting the whole audit process and allowing better efficiency and focus of resources into more critical areas of concern.

Resolved

That the Audit Committee notes the contents of the External Audit

Plan

The Vice-Chairman expressed concern about the increasing list of recommendations from internal audit activity that had not yet been implemented and noted that by not responding to the outcome of internal audit work being done the Council was not living up to its philosophy of continuous improvement nor achieving value for money.

Maggie Rae, representing the Corporate Directors (CDs), acknowledged that the regular contact between the CDs and the committee had drifted due to the recent focus on budgeting and cost cutting processes within the Council. She emphasised that CDs are keen to reinstate this regular contact in order to interface with the team and be proactively involved in resolving issues. Mrs. Rae noted that the reason for recommendations appearing not to have been progressed was mainly due to the impact of policy changes and hence recommendations not requiring any action or indeed requiring to be closed.

She commended the new audit process proposed and commented that it gave a more rounded view of the organisation and enabled the process of delving deeper into areas requiring improvement and success. This was a process that the CDs would want to work on and improve.

The Chairman commented that the response received and action taken since the Committee highlighted the issue of outstanding recommendations was commendable.

Stuart Trubee, Senior Auditor – SWAP, took the Committee through the initial processes for accessing live Audit Reports and related data from the SWAP web portal.  It was noted that the Committee would require adequate training in order to be able to access and use the system effectively.

Resolved

That SWAP would organise a training session for the Audit Committee to enable Members to effectively access audit reports on the SWAP web portal.

Jenny Strahan, Assistant Director – SWAP, presented the detailed findings of

the Internal Audit Activity - Q4 update 2015/16.  In the course of the presentation and the discussion, the issues discussed included: changes in presentation of information, enhancement and volume of reporting, the use of improved charts and graphs, positive results on internal audit activity performance reviews and concerns about findings on schools earmarked for financial health visits.

In response to questions regarding the basis of selection of the schools involved and the subsequent findings Ms. Strahan informed Members that 5 out of 9 schools reviewed had performance issues and that the reviews were done in conjunction with the Schools and Budget team with direction given to focus on schools with areas of high risk. 

Concerns expressed also focused on opportunity for fraud which put individuals, schools and the Council at risk and the challenge faced by schools in recruiting governors with relevant finance skills.

Mr. Hudson commented that there was no evidence to suggest widespread fraud among schools but there were areas for improvement to ensure robust financial controls and strong financial stewardship within schools in the county. He noted that there was doubt as to whether recommendations made were being communicated to relevant finance committees and governors within schools and  ...  view the full minutes text for item 21.

There were no urgent items.

To note that the next regular meeting of the Committee will be held on 27 July 2016 at 10.30 a.m.